Canadian Lenders Fret About Apple Pay

By

Rita Trichur

Apr 17, 2015 10:37 am ET

Associated Press

Talks are heating up between Canada’s six biggest banks and Apple Inc. about launching Apple Pay north of the border, but lenders here are worried the mobile-payments service could deliver a blow to their credit-card revenues, according to people familiar with the matter.

Negotiations are ongoing, but there is already a suggestion that Canadian banks could face higher costs for Apple Pay than their U.S. peers. A base case for Canadian banks could be in the range of 15 to 25 basis points on credit-card transactions to Apple, according to one of those people. In the U.S., Apple charges 15 basis points per credit-card transaction, according to those people. Apple has not publicly disclosed what it charges for the service.

Although the credit-card business remains profitable for Canadian banks, lenders are fretting because they are already grappling with other hits to their revenues.